Tax-free mileage allowance for private car – what you need to know
Does an employee use their private car for business trips ? Then the employer may provide a tax-free mileage allowance of up to €0,25 per kilometer . This arrangement also applies to commuting. In this article, you will read everything about the tax-free mileage allowance for private cars, including conditions, exceptions, and calculations.
Netting arrangement within the tax-free mileage allowance for private cars
Sometimes an employee is reimbursed less than €0,25 per kilometer for certain trips, for example for commuting. A higher reimbursement may apply for other trips.
However, the total reimbursement remains tax-free, as long as the average does not exceed €0,25 per kilometer. Condition: you must record in writing that you are applying the netting scheme . This scheme may also be used within the work-related expenses scheme.
Declaration or fixed fee?
In principle, a tax-free mileage allowance is only permitted on a reimbursement basis. Employees must therefore keep track of when they have traveled for business.
Please note: no claims on days off or sick days.
Fixed tax-free mileage allowance for private cars: when is it permitted?
For practical reasons, a fixed tax-free travel allowance may be provided if:
The employee travels to fixed workplaces
He probably did this at least 36 weeks a year doing
Whether he travels at least 128 days a year to the same location
Calculation of fixed fee
214 working days x €0,25 x the number of kilometers per day Divide this amount by 12 (month) or 52 (week).
For part-timers, a proportional share of those 214 days applies.
Post-calculation for tax-free mileage allowance for private car
You must perform a post-calculation in the following situations:
Expected long-term absence, such as illness
Home-work distance greater than 75 km one way
In that case, you may still pay out the fixed fee in:
The month of absence and
The following month
After that, only again from the month in which the employee returns.
Please note: no reimbursement = no deduction
If the employee receives no reimbursement, he may no longer deduct travel expenses on his tax return. This has applied since the abolition of the deduction for work-related car expenses.
Or listen along with the expert
TrackJack spoke with the market leaders. Heleen Elbert, a tax lawyer and the leading expert on car taxation, answers this question.
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